2006 CAMPAIGNGOP loses 7-figure lawsuit to DemJudge awards $2 million over donations by governors group

AUSTIN — A state district judge on Tuesday awarded Chris Bell, the 2006 Democratic nominee for governor, $2 million in his lawsuit against the Republican Governors Association after ruling the group violated state law with a pair of last-minute $500,000 donations to GOP Gov. Rick Perry that year.

"I think it's a victory for transparency. That's what the whole case was always about. That's why we have election laws, so the public will know the source of contributions. We always felt this was a rather clear attempt to hide the real source of that contribution," said Bell, who earlier this year got a $426,000 settlement from Perry's campaign to remove the governor from the lawsuit over the $1 million in donations.

Perry campaign spokesman Mark Miner had no comment on Tuesday's ruling, saying Perry no longer is part of the case.

Republican Governors Association spokesman Mike Schrimpf said the group will appeal the decision by state District Judge John Dietz.

"Today's ruling is just one step in a four-year political lawsuit brought by Democrat trial lawyer and failed gubernatorial candidate Chris Bell," Schrimpf said. "We believe the judge ruled incorrectly and are confident we will win on appeal, which we will file immediately. Unfortunately, this junk lawsuit has gone on for four years, and to the Democratic trial lawyers' dreams, will likely go on two or three more. The good news is that it won't divert from our efforts to win in Texas or any other state this cycle."

The lawsuit stemmed from $1 million Perry's campaign received from the RGA late in the closing days of the 2006 election without revealing the source of the funds. A Houston Chronicle report in January 2007 showed that the money likely came from Houston homebuilder Bob Perry, who is not related to the governor.

'Just a passthrough'?

Bell sued, saying the association and Perry broke the law by failing to provide a list of donors to show the source of the funds. The RGA reported its top donors to the IRS in January after the election. The RGA and Perry's campaign have said they did not violate state law.

"The problem was that RGA wasn't a qualified political committee anywhere. You can't give in Texas unless you're a qualified political committee," said Buck Wood, Bell's lawyer.

Wood said that because of the timing of the contributions to the RGA and its subsequent donations to Perry "a jury would have agreed that, hey, this was just a pass-through."

Dietz wrote Tuesday that the RGA had not complied with the legal requirement for filing a campaign treasurer appointment when it contributed the money to Perry; did not provide a written statement listing the full names and addresses of donors to the RGA in the 12 months preceding the donation; and did not report political contributions and expenditures to the Texas Ethics Commission.

The penalty is twice the value of the contributions that Dietz found to be unlawful.

"The legislative intent in enacting the statutory scheme regulating the campaign finance laws in Texas was to limit undue influence over elections and to fully disclose information related to expenditures and contributions," Dietz wrote.